Standing Committee B

[Mr. John McWilliam in the Chair]

Proceeds of Crime Bill

Clause 321 - Concealing etc

Amendment proposed [this day]: No. 426, in page 186, line 11, after 'he', insert 'knowingly'.—[Mr. Hawkins.] 
 Question again proposed, That the amendment be made.

John McWilliam: I remind the Committee that with this we are taking amendment No. 428, in clause 323, page 187, line 2, after 'he', insert 'knowingly'.

Ian Davidson: I want to continue with the points that I was making this morning. I regret that the hon. Member for Surrey Heath (Mr. Hawkins) was not here to hear me start. I see that he has now arrived. Better late than never, I suppose.

Alistair Carmichael: Will the hon. Gentleman reconsider that judgment?

Ian Davidson: It is better never late, I suppose. I am particularly glad to see the hon. Gentleman. He was not able to join us in our deliberations this morning. Only one of the three Liberals was present this morning and only one is present this afternoon. I wonder why they did not accede to the Scottish National party's request to have a Member on the Committee.

Alistair Carmichael: Perhaps I can assist the hon. Gentleman. The reason is that we could not accede to a request that was not made.

Ian Davidson: Goodness me, I find that difficult to believe. Are you seriously telling me that the SNP did not ask for a place on this serious Committee?

John McWilliam: Order. As the Chairman of the Selection Committee, it would be improper for me to tell you that.

Ian Davidson: Goodness me, who can I ask in those circumstances? The hon. Member for Orkney and Shetland (Mr. Carmichael) is telling me that the SNP did not ask for a place on the Committee and the Chairman is telling me that he cannot say.

Nick Hawkins: The hon. Gentleman was referring to my fractional lateness. I understand from my hon. Friend the Member for Beaconsfield (Mr. Grieve) that I missed only about
 three words of the hon. Gentleman's opening remarks. I am probably no later than he and I both are when we try to catch passes when we play for the Lords and Commons rugby team.

John McWilliam: Order. Before we continue in that strain, the question of whether it is better to be late, even ''knowingly'', is not in order, as the amendment applies only to the words in the Bill.

Ian Davidson: That is an excellent point, Mr. McWilliam.

David Wilshire: I shall be exceedingly helpful to the hon. Gentleman. He asks whom he should contact regarding vacancies on the Committee. The system has changed and the Whips Office now looks after the minor parties, so he should address his question there.
Mr. Davidson rose—

John McWilliam: Order. That is not about the amendment.

Ian Davidson: Thank you, Mr. McWilliam. I thought that I was being called to order before I had even spoken, which would have been a record even for me.
 I should like to consider the point about the SNP not having asked for a place on the Committee. That seems scandalous, and hon. Members may wish to return to the subject in due course. 
 I was speaking about the fact that the Conservative party's position on such matters is a disgrace. While it mouthed that it was opposed to money laundering, its actions did not indicate that it took the issue seriously. We must ask whether that is a serious problem that must be addressed. Lawyers, accountants and bankers face a major difficulty that professional organisations have so far been unable to cope with through their internal mechanisms. I was struck by the fact that the hon. Member for Beaconsfield referred to the proposals as tyrannical, which seems a trifle over the top. We must remember that we are dealing with professions that pride themselves on their standards of professional ethics and schemes of self-government. [Interruption.] It must be absolutely clear that when huge sums are under account such schemes of self-government are effectively worthless. [Interruption.]

John McWilliam: Order. There seems to be more than one meeting going on in the Room this afternoon. I should be obliged if hon. Members would listen to the person who has the floor.

Ian Davidson: Thank you, Mr. McWilliam. None of the conversations that were taking place involved the Liberal Democrats, as there is only one of them.

Alistair Carmichael: I can have a conversation with myself.

Ian Davidson: Indeed. Wherever two Liberals gather, there are four opinions, three press releases and four cracks in the road.
 Those schemes of professional ethics are effectively worthless when huge amounts are dangled in front of those involved. Lawyers, bankers and accountants cannot be trusted to police themselves. In the past few years, they have spent more time in self-congratulation than self-investigation, and in such circumstances the Government must act. 
 I read the other day that 
''solicitors are considered a soft target by fraudsters and money launderers because they lend legitimacy and respectability to illegal transactions''. 
[Interruption.] Am I being heckled by the Liberal, or is he just talking to himself? I am disappointed to interrupt that dialogue.

Howard Stoate: Monologue.

Ian Davidson: No, there are two of them—he is schizophrenic—and that was probably Orkney talking to Shetland, having a vicious internal dispute.

John McWilliam: Order. As long as the hon. Gentleman does that in English and not Norse, we are all right.

Ian Davidson: Either way, I suspect that we would have difficulty understanding him.
 That quotation is from the Law Society's website, which issues several instructions to lawyers that are clearly not honoured in every case in practice.

Nick Hawkins: Is the website to which the hon. Gentleman refers that of the Law Society of England and Wales or the Law Society of Scotland?

Ian Davidson: The Law Society of England and Wales, but it is described as ''the Law Society'', in the same way as the Rugby Football Union describes itself as such even though it is only the English one. That is an egotism of the English that the rest of us are prepared to tolerate on occasion. The Football Association is another example.
 On several occasions, the website has said that lawyers should take certain measures. It states that clients should be sent standard phrases in a client care letter, such as 
 ''For the protection of our clients we operate a money-laundering reporting procedure. In certain circumstances, information will be revealed by us to the appropriate authorities in relation to any suspicion of money laundering.'' 
That seems to be good practice. The problem is that lawyers are not abiding by it. 
 The website goes on to advise lawyers about things that might cause ''fleeting suspicions''—not the Law Society's phrase, but that of the hon. Member for Henley (Mr. Johnson). The Law Society's advice to solicitors is to ''be alert'' to anything unusual, such as unusual settlement requests, for example by cash or third party cheque, unusual instructions, such as no discernible reason for using the firm, or large amounts of cash, for example holding cash in a client account pending instructions or merely in order to forward to 
 a third party, or a secretive client who is reluctant to give details of his identity or answer questions about the deal. 
 The fact that the Law Society must advise its members that the presence of any of those factors should give cause for suspicion suggests that even the society does not trust its own members to reach the right judgment in circumstances in which chunks of money are dangled in front of them.

Nick Hawkins: The Law Society's website rightly and properly deals with the issue, and its alternative interpretation is that it wants to ensure that all proper steps are taken to deal with questions about the funding of organised crime and money laundering. I know that the hon. Gentleman is suspicious of all lawyers, but that is an equally acceptable and proper interpretation of the website. The society is simply trying to ensure that the law—even as it stands under the Bill—is followed properly.

Ian Davidson: Some people may believe that, but I am not one of them. The implication is that the Law Society believes that its members cannot be trusted to act properly unless they are told what to do. The society also suggests to its members—and I will return to the matter in another context—that they should be ''alert to anything unusual'', such as
''suspect territory (for example, countries where drug trafficking or drug production may be prevalent, or where the banking systems are less sophisticated than in the UK). 
 If any unusual factors give cause for concern, solicitors should explore the unusual nature with the client to allay concerns or ensure the transaction proceeds as normal.'' 
The instructions and advice being issued to solicitors are clear, but they are not being abided by. The society advises solicitors to 
 ''Consider adopting a policy. The firm may wish to agree a policy that says sums of more than a fixed amount will not be accepted in cash unless previous authorisation is given. In this way, should cash be offered or if cash is desirable, the circumstances can be explored in good time and the circumstances considered in advance.'' 
The fact that it has issued those instructions to its members suggests that it is unhappy with the existing arrangements. 
 As I was reading in bed last Sunday, as I am prone to do, the Journal of Money Laundering Control 1999, volume 3, several sections leapt out at me as being relevant to the provision. Of particular relevance is a piece by Andrew Campbell, who cites Bosworth-Davies and says: 
 ''The activities of professional advisors, particularly lawyers has, in the past, caused considerable concern in the field of money-laundering activities, due in no small part to the existence of the secrecy generated by the attorney-client privilege.'' 
I hope that we shall discuss that issue at a later stage, because it is absolutely clear that the existing arrangements are unsatisfactory. The journal, which made interesting Sunday reading, went on to mention that 
 ''The NCIS received 14,000 reports of suspicion of money laundering in 1997 but only 236 of these came from solicitors. In 1996, 300 reports from solicitors had been received. 
 The National Criminal Intelligence Service has made it clear that it is disappointed by the attitude of solicitors in respect of what it describes as their ''legal and moral'' obligations. While it is of the opinion that solicitors are failing to report suspicious circumstances, the Law Society takes a more generous view and puts a spin on it by suggesting that the reason why the number of reports is falling, or is not particularly high, is 
''an indication that criminals are finding that solicitors' firms are providing a 'more hostile environment for money laundering'''. 
That is a justifying description. A particularly helpful observation from Bosworth-Davies is that 
''many lawyers are of the opinion that the money-laundering laws do not apply to them,'' 
I have heard nothing from Opposition Members to persuade me that they believe that money laundering regulations should apply to them or their friends. It strikes me that they are consistently trying to defend the indefensible and implying that everything is hunky dory.

Dominic Grieve: It is difficult to understand how the hon. Gentleman can reach that conclusion. Although he was present in Committee in the flesh this morning, perhaps his spirit was elsewhere. He clearly has not been listening to what we were saying. First, we have not disagreed in Committee with the principle of the previous money laundering provisions. I can see the merit of them. Secondly, we have said to the Committee that the intention behind the provisions is not one with which we disagree.
 The specific matter on which we have disagreed is the test to be applied when determining whether there has been criminality in respect of a breach of the provisions. If the hon. Gentleman cared to focus on that, he might find that it would be a better matter for him to discuss than wider issues about which he makes assertions that are not backed by the evidence or the facts.

Ian Davidson: I listened with considerable care to most of the points made by Conservative Members this morning. I confess that I was out of the Room a couple of times and that, on a few occasions, I found myself losing the will to live after hearing the constant repetition. In general, however, I clearly established the opinion that, while Conservative Members were paying lip service to the issues under the Bill, virtually everything that they proposed would water it down. They are not tough on crime and they are not tough on the causes of crime. They demonstrate all the rigidity of a blancmange. They should stand up a little more firmly in favour of taking action in such matters.
 I remember listening with amazement to Conservative Members earlier when they told us that the rules should not be as tight as proposed under the Bill on the basis that, if they were too tight, it would be too difficult to carry out such provisions and that would make it easier for drug dealers and others to launder money. I have never supported such an argument when I have heard it applied to burglary, 
 assault or theft, when the number of cases and the imposition of law cause difficulty in catching the criminal and processing the cases. It is certainly no reason for not taking seriously the burden of proof for the crime of assault.

Nick Hawkins: I appreciate that the hon. Gentleman and I will never agree about his interpretation of where we are coming from. I shall not repeat what was said by my hon. Friend the Member for Beaconsfield, but we may be right—expert practitioners have advised us that we are right—that much of what is proposed by the Government is likely to be so cumbersome that it will be unworkable and enormously damaging to the City of London. Will the hon. Gentleman understand that his Government have made a huge effort over the years to cultivate—and to praise—the City? Surely, it would undermine the Chancellor of the Exchequer's strategy if the City of London were so damaged by the Bill that all the business on which the economy, including that in the hon. Gentleman's constituency, so deeply depends was shifted away to places such as Frankfurt.

Ian Davidson: Is the case being advanced that we should be lenient with money launderers, crooks and rascals so as not to place the City of London at a competitive disadvantage vis-a-vis other jurisdictions? British legislation is being introduced in parallel with legislation elsewhere and with action being taken by intergovernmental taskforces to deal with misbehaviour in tax havens and other locations in which financial arrangements are of dubious provenance.
 With regard to the legislation and international forums, the Government's intention is to ensure that there are equally toughly enforced level playing fields across all jurisdictions. I would welcome it if we could employ a lighter touch because we were confident that the City of London—and elsewhere—could self-police. I regret that we have to go down this road, as it is more bureaucratic than I would wish, but we are going down it only because the City of London cannot be trusted to police itself—neither can lawyers and accountants, but bankers are perhaps the worst, because they deal with larger sums.

John Robertson: Does my hon. Friend agree that the City of London lost its good name a long while ago, and that it is time the Government tried to get it back for it, because it is incapable of doing it for itself?

Ian Davidson: That is a helpful point. In view of what has been happening recently, the good name of the City of London has been tarnished. Opposition spokesmen have mentioned the Maxwell case, and other Committee members mentioned Barings and Enron. London firms are involved in the Enron case: the firm of accountants that recently shredded documents for Enron has branches in the United Kingdom.
 A recent visit that I and others made to Nigeria has a bearing on our discussion of the City of London. During our trip we discussed the present financial 
 difficulties in Nigeria. There are reports in today's press of riots in Nigeria that have been caused, in no small part, by its financial difficulties. 
 The country's previous leadership siphoned off huge sums of money. It is alleged that General Abacha siphoned $1.3 billion into foreign banks. The Financial Services Authority investigated the handling of bank accounts linked to the good—I mean bad—general. Its report of March 2001 revealed serious weaknesses in anti-money-laundering procedures at several banks in the United Kingdom: 42 accounts at 23 banks were investigated, and it was estimated that the turnover of those accounts in the four years to 2000 had been $1.3 billion; 15 of the banks were judged to have significant ''control weaknesses''—which is a revealing euphemism—and 98 per cent. of the funds passed through those banks. 
 The banks that handled this money were not the bank of Toytown, South and similar institutions. They were very respectable organisations with substantial reputations in the United Kingdom. The Nigerians would be justified in taking the view that the United Kingdom has been a recipient of stolen money from Nigeria, and that we have been slow in co-operating with the Nigerian authorities to return any of it. Our banking authorities have been less helpful to them than have those of Switzerland, France, Luxembourg and Liechtenstein. Authorities in those countries co-operated with the Swiss lawyers who have been representing Nigeria, whereas the British system did not. 
 I wish to draw attention to some of the banks, and some of the sums that they handled, lest we think that they simply made a few slips. Banque Paribas handled $36 million: the funds were moved in 10 payments from London to a Swiss bank, and the money was alleged to be bribes extorted from a French construction company. There was also a sum of $17.2 million—the funds were moved in two payments from London to a Swiss bank, and the money was alleged to be bribes extorted from Nigerian business men. 
 The Banque National de Paris—all the branches to which I am referring are in London, and presumably some of the staff involved were British—handled $7 million: two payments were moved to the bank's Geneva branch. The Credit Agricole Indosuez handled $92 million. Its funds were moved to London from Switzerland, the French bank's Swiss branch has been reprimanded, and a frozen account in London of Abacha's fixer, Bagudu, still contains $9 million, and so on. The Nigerian Government paid $225 million to Mecosta in a fraud, when they paid double price to buy back debt certificates. Barclays bank, a British bank, moved $172 million from London to Swiss banks, and there were alleged bribes and transfers from Abacha-linked accounts. Cash was also moved by Barclays to New York, and four payments were made to Zurich Credit Suisse, totalling $52.8 million. Six payments were made to banks in Geneva from Barclays accounts, totalling $36.8 million. Four payments were 
 made from Nigeria to Barclays in New York, totalling $83 million. Controls have not been tightened since then. 
 First Bank of Nigeria, which is based in London, also moved money around, although I shall not go into the details. Abacha's sons also control an account in the Berkeley square branch of Citibank. Movements to London included $13 million from money paid by Nigeria for vaccines. Movements out included the transfer of $10 million of vaccine money to New York, and the transfer of $39 million to Switzerland and elsewhere when investigations began after General Abacha's death. Interestingly, Citibank was described in United States Senate hearings as having a ''rogues' gallery'' of lucrative private banking clients. Citibank is increasingly active in London. 
 Midland bank—now part of HSBC—was also involved in relation to payments totalling $6 million. Payments under investigation include $2.1 million moved from the central Bank of Nigeria to the Cross Roads branch of Midland bank in Golders Green, north London. The equivalent of nearly $600,000 belonging to one of the Abachas' colleagues was found in another north London Midland branch. Other payments made by Addax, a Switzerland-based oil company, and $1.5 million moved to a Banque National de Paris account in Switzerland, were also via Midland. 
 The Union Bank of Nigeria, based in London, was similarly involved in the Abacha cash. ANZ Grindlays was involved to the tune of $72.2 million coming through London. NatWest, which is now part of the Royal Bank of Scotland, was involved in relation to the movement of $1.5 million from Luxembourg to an Abacha-linked account in the St. John's Wood high street branch. From there, it was moved into the hands of David Jones, of Smith and Tyers, in 1999. Merrill Lynch was involved in relation to $3 million transferred from Nigeria to London. The only people to come out of this with credit are those at Merrill Lynch's branch in Switzerland, who refused to accept one Nigerian deposit, and were praised by the Swiss authorities for conducting themselves correctly. Commerzbank AG was involved to the tune of $3.5 million. 
 That adds up to a substantial sum, all of which has flowed through London and been subject to fees and charges imposed by banks in London. I must confess that I was distressed, as someone who has generally supported human rights legislation, to find that Matrix, the human rights barristers, appeared on behalf of the Abacha family on the grounds of their human rights being neglected when the British Government were attempting to provide information to the Swiss and Nigerian authorities.

Nick Hawkins: I realise that the hon. Gentleman is making serious points, and my hon. Friend the Member for Beaconsfield and I entirely agree with him in his criticism of such people. I hope that he will understand that the comments that he has just made about legal representation come close to home on his own side. I also hope that he understands our fear that
 the kind of people whom he wants to hit will become more difficult to hit if the legislation proves unworkable, for the reasons that we have set out.

Ian Davidson: No, I do not accept the thrust of that. May I take a little time to respond to the hon. Gentleman's point about legal representation hitting close to home on our side? Does he believe for a moment that that should make any difference to us? My wife does not work for the firm and nor do any of my children. The matter does not hit close to home for me. I am unaware of any of my colleagues who work, or who have worked, for Matrix. Should that matter at all?
 Perhaps that is an insight into how the Conservatives work: they would take account of who had relatives or connections in a particular firm, but I do not believe that we should. It is irrelevant that Matrix may have a connection with a Labour Member. I am surprised that the hon. Gentleman even raised that. I do not want to labour the point—[Hon. Members: ''Go on.'']—although people obviously feel that I should.

David Wilshire: To put the hon. Gentleman's mind at rest, may I confirm that I have no connection with that firm or any of the firms that he mentioned and nor, to the best of my knowledge, do any of my family, relatives, neighbours or friends? However, I disagree fundamentally with what he said, and I shall vote with my hon. Friends on the matter.

Ian Davidson: That is a fascinating point that has nothing to do with the point that I raised.
 I return to the question of Matrix striking a little close to home. I shall give way to the hon. Member for Surrey Heath if he wishes to clarify the extent to which my criticism of the banks and legal firms that are involved in the matter should take account of any connection that I might have with them. Even if I have an account with a bank, I am not responsible for directing its affairs. That is perhaps unfortunate, for it and for me. The question of connections is neither here nor there. 
 I see that the hon. Member for Surrey Heath has chosen not to respond but has passed responsibility to his apprentice.

Dominic Grieve: This may arise from a misunderstanding of what was said. The hon. Gentleman appeared to criticise a barristers' chambers with a human rights track record for taking on the Abachas' case. That is unjustified, because there was a professional duty to do that and failure to take the case would have been a breach of professional conduct by a member of the chambers.

Ian Davidson: That is an interesting point, although I do not follow the connection between that and the matter hitting close to home, which was the point made by the hon. Member for Surrey Heath. The hon. Member for Beaconsfield did not mention anything hitting close to home, and I assume that that means
 that he is deserting the field on the point. Will anybody clarify it? Does the hon. Member for Henley wish to speak?

Boris Johnson: I hesitate to try to improve on anything that was said—I could not really improve on it. I speak only because the hon. Gentleman persists in ignoratio elenchi and failing to understand the point that is put to him. It is clear that learned and distinguished counsel at Matrix chambers believe that there are human rights points to defend, over which, once again, the hon. Gentleman is prepared to ride roughshod.

Ian Davidson: That is an interesting point, but I do not see its relevance to hitting close to home, about which I asked for clarification. The hon. Member for Surrey Heath told me that the matter was close to home and that I should be cautious. Nobody has clarified why that is, or should be, the case. I shall move on and remain puzzled at the double standard that the Opposition apply. Perhaps it is all in the context of sneaking.
 Lest hon. Members think that I am attacking only British banks, may I mention that several banks in Jersey are implicated in the foul trade?

John McWilliam: Order. The provision does not extend to Jersey. The hon. Gentleman will be out of order if he persists in making his point.

Ian Davidson: You make a very fair point, Mr. McWilliam. I was raising the matter only to clarify that the guilty banks in Jersey also have branches here. The style of operation that they adopt in Jersey is likely to be the same culture that pervades the whole organisation. In Jersey, there is Deutsche Bank, the Bank of India and Citibank.
 I want to concentrate on what is reasonable and what is unreasonable. I referred earlier to the point that if people did not know, they ought to have known. I very much want the onus of activity placed on the professionals who are involved. When the defence put forward is, ''I had no suspicions whatever,'' it should be reasonable for the courts to say, ''Well, given the circumstances, you ought to have had suspicions, so you are guilty of something anyway.'' The sooner we have a few high-profile hangings of lawyers, accountants and bankers who have been caught by the Bill, the more salutary the effect will be.

John McWilliam: Order. I remind the hon. Gentleman that capital punishment is not covered by the Bill, nor have I seen any amendments to that effect.

Ian Davidson: There might be one later. I shall certainly consider tabling a new clause to that effect on Report. It would draw the attention of lawyers and others to such matters if they thought that they would be severely punished. The great advantage of capital punishment is that it would reduce recidivism considerably.
 My hon. Friend the Member for Glasgow, Cathcart (Mr. Harris) referred to tanning studios. Like him, I have a substantial number of them in my constituency, but I must confess that I have never seen anyone go 
 into them. There is a widespread suspicion that most of them are used to launder drug and other criminal money in Glasgow.

David Wilshire: Given that the hon. Gentleman said that he has never seen anyone going into the tanning studios, can he tell us how many hours a week he hangs around outside them?

Ian Davidson: The hon. Gentleman makes a valid point. Perhaps I have not been scrutinising such premises as closely as I should. As I drive to and fro on constituency business, I see many commercial premises. I see people going into newsagents. The Committee may find it difficult to believe about my constituency, but I see people going in and out of public houses. I see them going in and out of bookies, but I have never seen people going in and out of tanning studios—
Mr. Carmichael rose—

Ian Davidson: Not even Tommy Sheridan. I anticipated the hon. Gentleman's witticism, so he has no need to intervene.
 Given the number of tanning studios in Glasgow, if members of the Committee wandered down any street in the city, they would expect to be confused into thinking that they were in the Caribbean. In fact, all they would see is peelie-wally faces—I look forward to seeing those words in Hansard—who obviously have been nowhere near tanning studios. Unless only a few people are now burned to the colour of toast and have been overdoing such treatment, it means that the studios are not being used properly, yet they are in abundance.

John Robertson: Does my hon. Friend agree with Strathclyde police, who have told me that it is well known that tanning studios in the Glasgow area are being used for money laundering, but the problem has always been to get them to court so that the people involved can be convicted. The Bill will go a long way towards bringing to book the people who operate such places, not only to get the money from them, but to get them for their criminal processes.

Ian Davidson: My hon. Friends the Members for Glasgow, Cathcart and for Glasgow, Anniesland (John Robertson) have had several discussions with Strathclyde police, who confirmed that, in their view, several tanning studios were being used for money laundering. Similarly, we have information that a number of taxi firms are being similarly used. The police also confirmed—as have others in the west of Scotland—that several lawyers' firms are well known to them, the criminal fraternity and others to be conduits for drug money and other ill-gotten gains. Their difficulty is finding the means under the existing law to catch such people.
 A substantial amount is coming in, allegedly from tanning studios to which nobody seems to go. Professional advisers are accepting it and putting it into the system, thereby laundering it. That happens 
 regularly. I believe that the professionals involved are well aware of the source of that money. If they are not, they ought to be. Any effort by Conservative Members to weaken the Bill in the way that they are proposing plays into the hands of the evil men and their assistants who are poisoning many young people in my community. That is why I am concerned about the flippant attitude that some Opposition Members have adopted to many of the arguments that have been advanced by Labour Members. 
 Despite protestations that they are adopting a balanced approach to the Bill, Conservative Members have spent 20, 30, 40 times as long trying to weaken it as they have trying to strengthen it. I cannot remember one Opposition amendment that would toughen the Bill. They are making efforts only to water it down, which confirms my view that the Opposition are the criminals' friends. I hope that the Committee will reject the amendment and, over the next few weeks, will look for ways in which to toughen some of the Bill's provisions, particularly when we debate lawyer-client privilege and the way in which that is used to conceal information about money laundering, drug trafficking and other offences.

Boris Johnson: I did not intend to speak, but I will because I have been so moved by the hon. Gentleman's remarks. His fascinating speech lasted about 40 minutes. It would have been listened to with great attention in Nigeria and elsewhere that he told us a lot about. He accused Conservative Members of being flippant and unbalanced in their presentation of views. He was being flippant in another direction and another sense. I want to take issue with his view of the world, which seems to be unremittingly pessimistic about human nature and the possibility of human goodness.
 We heard an awful lot of stuff about how every banker and accountant in the City of London was corrupt. That was the gist of what the hon. Gentleman was saying. He does not seem to want to disown his general presentation, but throughout the past 29 sittings we have heard an unremittingly savage and depressing portrait of life in Pollok. There seems to be an endless Darwinian struggle there. He plays to the English stereotype of inner-city Glasgow, endlessly supplying us with accounts of people who must be presumed to be criminals, without there being any evidence to that conclusion. We have the impression of there being endless squabbles between smackheads snorting deep-fried Mars bars. I am sure that he does not mean to give that impression about his entire constituency.

John Robertson: I would hazard the guess that the hon. Gentleman has just made the case for my hon. Friend the Member for Glasgow, Pollok. Many people in Glasgow live in deprived areas that are plagued by drug dealers. I know that it is quite funny to say that, but some of us have to live with the repercussions, and that is not funny, believe me.
3.15 pm

Boris Johnson: I take that point very humbly and sincerely; indeed, that is the point that I was making. It is a tragedy that drug dealing goes on in such cities. The hon. Member for Glasgow, Pollok errs in having us believe that everyone is as guilty as some of his constituents are. He would have us believe that every tanning studio or parlour is a drug-ridden place and that everyone who is found with large amounts of money on their person must be culpable.

Ian Lucas: Is it too much to expect someone who suspects that money has been criminally obtained to disclose that fact?

Boris Johnson: That is the very point to which I was coming. Of course it is not too much to expect someone who genuinely has the fully formed idea that money is tainted or criminally obtained to disclose it. The amendment would ensure that we do not capture those who are innocent under the Bill. All that I wish to suggest is that there are reputable accountants, solicitors and lawyers in Pollok, just as there are reputable people across the country who might be caught out by badly drafted legislation.

Tom Harris: The hon. Gentleman may remember that a couple of weeks ago—it feels like a year and a half ago—the hon. Member for Beaconsfield said that, despite the fact that many pieces of legislation issued under different Governments over many years have tried to clamp down on the problems that the Bill aims to solve, the fight was being lost. Will the hon. Gentleman tell the Committee whether he believes that the amendment will strengthen or weaken the Bill, and whether it will make us more or less likely to win that fight?

Boris Johnson: It has been the central contention of Opposition Members throughout the day that the amendment would strengthen the Bill, as it would make it more effective and more likely to catch the truly pernicious influences in constituencies such as Glasgow, Pollok—and, indeed, in my constituency, which in many ways is not that different from Pollok.

Ian Lucas: Will the hon. Gentleman please explain how the amendment would strengthen the Bill?

Boris Johnson: It would make it less easy for highly paid lawyers to get clients off the hook, and it would make the Bill more transparent, as it would be evident beyond peradventure that you cannot be done for money laundering unless you know that the money that you are concealing, disguising, converting or transferring is criminal property. The amendment would serve that purpose well.

John McWilliam: Order. When the hon. Gentleman refers to ''you'' he is referring to me. That is a new series of crimes for my book. In past Committees, I have been accused of everything from money laundering through Rachmanism to murder, so the hon. Gentleman is not alone.
 Mr. Harris: The hon. Member for Henley has shown great patience in giving way, for which I am grateful. Does he believe that existing legislation has failed because it was too tough, or because it was too lenient? Does he believe that the tide can be changed in the direction that the Committee wants by creating loopholes to get professionals off the hook in court?

Boris Johnson: I do not believe that anybody on the Committee would want to approve legislation that caught innocent people and sent the wrong people to prison. I sincerely accept that previous legislation may not have been as successful as it might have been. However, that does not justify our pushing through legislation that is badly drafted, and it would be a great irresponsibility to do so. It is therefore right to make an amendment to protect not the many, many guilty people in Pollok and elsewhere, but those who might be innocent. As I understand it, that is the purpose of the amendment. It is civilised and judicious, and we should agree to it.

Vera Baird: I cannot seriously believe that any of the lawyers on the Opposition Benches believe that the amendment is sufficient. I am sure that I have heard it said several times that ''knowingly'' would be inappropriate. It is very difficult to prove that someone knows something. I suspect that the hon. Member for Spectator, South is talking out of the back of his neck when he recommends the amendment. I do not believe that it is consistent with the comments of Opposition spokesmen, who have been discussing the difference between suspicion and belief. It has been made clear that if ''suspicion'' were changed to ''belief'', they would be happy. I do not agree, and I do not support the amendment.
 I want to put right something that has been said that is wrong—that my amiable Friend the Minister is a tyrant, because he is widening the state of mind necessary in order to be guilty of a criminal offence involving drug-trafficking money or money laundering. He has done that by making it easier to secure a conviction. 
 This morning, when I was musing about the comparison with handling stolen goods, which is inappropriate, because that is a completely different sort of offence, I wondered what the current law on money laundering and drug trafficking requires as a state of mind. I therefore read it over lunch, because I am a sad character. 
 Section 49 of the Drug Trafficking Act 1994 currently covers the offence that the clause will cover—concealing, disguising, converting or transferring property, or moving it out of the jurisdiction. That is the same offence. We lawyers should have a self-denying ordinance about speaking in Latin. We should stop talking about mens rea and inter vivos gifts and all the other terribly exclusive ways of talking designed to exclude from the discussion people who are not members of the club. That is why I shall talk about state of mind, rather than mens rea. 
 The state of mind necessary for the current offence of concealing, disguising, converting or transferring property is that a person is guilty of that offence if knowing or having reasonable grounds to suspect that the property is part of drugs trafficking.

Dominic Grieve: Will the hon. Lady give way?

Vera Baird: I shall finish my point. I am sure that the hon. Gentleman rises because he understands my point. Mens rea now is wider than the provision that we are introducing. People need not suspect that the stuff is dodgy money. They may be quite oblivious to whether it is dodgy, or indeed believe that it is not. If another person would believe that it was, because there are reasonable grounds for suspecting that, the person would be guilty, even if they never suspected it. That is a very draconian provision. Only about five minutes ago, I wrote down, accurately, what the hon. Member for Beaconsfield said, which was that he supported entirely the existing law on money laundering and drug trafficking. He therefore seems to be in favour of the existing, draconian provision, not the better one that the tyrant is trying to introduce.

Dominic Grieve: There were a few moments this morning when the hon. Lady was not present in the Committee. I cannot remember whether she was present when we discussed clause 323, but I was more concerned about that. I said that although I could see the force of the argument in respect of clause 321, it was the combination of that with clause 323 that caused me particular concern. Unless I have misunderstood, clause 323, as it is currently drafted with regard to the state of mind, introduces an offence that is almost identical, if not rather wider in scope, than handling stolen goods, while at the same time introducing a different and lesser test.

Vera Baird: I want to address clause 323. I appreciate that we are discussing an amendment that has been conveniently taken now, and that deals with the issues about the use of the word ''knowingly'' in that clause. However, there is another discussion to be had about the clause, and in that I will find myself in the unusual position of trying to beef up the legislation, rather than water it down.

Dominic Grieve: In the old legislation, the provision operates within a restricted framework, because it is principally targeted at people who are subject to the regulatory framework, so it does not apply to every citizen of this country. However, clause 321 applies to every citizen.

Vera Baird: I do not agree. I refer the hon. Gentleman to the point I made with regard to the Drug Trafficking Act 1984. I also refer him to the comparable provision in the money laundering legislation in section 93C(2) of the Criminal Justice Act 1988. I can see nothing in that that confines the operation of the provision to the regulated sector. It states:
 ''A person is guilty of an offence if, knowing or having reasonable grounds to suspect than any property'' 
 represents another person's dodgy goods—if I may short-circuit the quotation in that way—they conceal, disguise, convert or transfer it.
 Therefore, with regard to money laundering and the proceeds of drug trafficking the test is wider, rather than narrower, than it is in the legislation under discussion—which also currently incorporates the reprehensible notion that a person can be guilty by negligence. Opposition Members have tabled an amendment to clause 324 that will remove criminal liability by negligence, and I have made it clear to the Minister that I heartily agree with that amendment. However, clause 321 does not show the Minister to be a tyrant: he has not widened the provision. On the contrary, he has narrowed it—he is a ''verray, parfit, gentil knight''. Mr. Hawkins: I am grateful for the experience that the hon. Lady brings to the Committee, and I am delighted that she supports my amendment to clause 324. As she has already told the Minister that she supports it, I hope that she will vote for it, as it would make a welcome change if she were to support us. 
 With regard to the substantive issues that the hon. Lady raised, I wonder whether I heard her correctly at one point. Did the quotation that she cited from the Criminal Justice Act 1988, section 93C (2) contain the phrase 
''or having reasonable grounds to suspect''? 
If the money laundering parts of that Act contain that term, that supports the responses that my hon. Friends and I gave to many of this morning's interventions.

Vera Baird: The hon. Gentleman quoted me correctly.
 I shall not vote for the amendment to clause 324. I said that I agreed with it, but I want to hear what the Minister says. [Laughter.] Anyone can laugh at this, but that is absolutely childish. The correct way for a member of a political party to proceed is to try to persuade internally. The Bill will pass through several stages after it leaves us and I will not stop trying to get rid of liability by negligence. Voting has little to do with the matter. 
 May I reiterate what I have said already, because I fear that the hon. Member for Surrey Heath has not clocked it? The test under the old law is that a person is guilty if he knows something or has reasonable grounds to suspect it. That is not a narrower provision: it is guilt by negligence. A person does not have to suspect something at all—there need only be reasonable grounds for suspicion. A person can be unaware of any suspicion but be guilty. The hon. Gentleman missed the point.

Nick Hawkins: I hope that I am innocent of the hon. Lady's charge. I understand her point. I agree with her entirely about a person not being guilty by negligence, which I think that she understands. However, our point, as we say in the amendment, is about a person
 doing something knowingly. We also raised the alternative of reasonable belief, which I suggested when I responded to the hon. Member for Wrexham (Ian Lucas).
 This morning, my hon. Friend the Member for Beaconsfield mentioned objective and subjective tests. That is the point that the hon. Lady makes. I have clocked it—to use her terminology—and I understand it.

Vera Baird: I am glad that the hon. Gentleman cleared that up second time round. The Opposition have said all day that the provision is wider than before and that the Minister is a dreadful tyrant to introduce it. The opposite is true, and the Opposition have been barking up the wrong tree for four hours, which has been painful to behold and irritating to hear.
 I shall address the idea of ''reasonable suspicion'', which the hon. Member for Lewes (Norman Baker) suggested would be better than suspicion. That suggestion muddles the level of suspicion with the grounds on which it is based. People can—and do—become suspicious instinctively that something is dodgy without giving any reasonable grounds for it. The suspicion may be due to instinct and experience. We do not want to license people in such a position to continue with a transaction rather than disclosing it, by introducing the ''reasonable'' qualification. The inclusion of the word ''reasonable'' is neither a good idea nor consistent with the Bill's purpose. 
 The difference between belief and suspicion is all that this can realistically boil down to. It is easy to see why belief is appropriate when considering stolen goods, because a person may have an item in front of them that was bought for a tenner, but is worth 50 quid. Therefore one knows for sure—or believes—that it is stolen. However, when we are considering outside observers in banking, who only look at transactions that come up on a screen or deal with somebody else's actions, it would be difficult and inappropriate to say that they must believe that there was a particular dodgy deal. The right trigger mechanism is that the outside observer is made suspicious. As soon as he is suspicious, we should encourage him to report the matter, which is what he must do. 
 I would never dare to interrupt my hon. Friend the Member for Glasgow, Pollok because I am a lawyer, and I am sure that I would get back twice as much if I did—and because he is excruciatingly funny and I am too busy laughing to interrupt him. He gave a forceful and detailed account of the evil at which the Bill, and this part of it, is directed. I was pleased to hear that. However, his speech presupposed that the measure is confined to the regulated sector. It is not, and never has been. If it were confined to the regulated sector, I would still suggest—even on my hon. Friend's principle that we can be draconian with toffs, but should be better to our people—that we should be careful. The regulated sector set out in schedule 6 includes, for instance, people working in building societies, who will not necessarily be the City of London people of whom he is always critical. Furthermore, it also includes business carried on by credit unions, which in my constituency are run by 
 volunteers. We must therefore be extremely careful. However, the Government have been appropriately careful, and the provision is narrower than the Opposition have painted it.

Bob Ainsworth: We have had a very wide-ranging discussion, which has taken longer and gone further than anticipated. I have no desire to lengthen it, but I want to make a couple of points.
 First, I need to make a correction—I became a little befuddled when I was quoting figures for the international comparisons this morning. I have created confusion in Hansard, and it is necessary to put the record straight. The point that I was trying to make is that there is a lower level of prosecutions in this country than there ought to be given the size of the financial sector, in the light of international comparisons. I said that there were 298 prosecutions in Germany in 1994, which is not true; the actual figure is 198. My argument was correct, however. In Germany, in 1994 the figure was 198, in 1995 it was 321, and in 1996 it was 349. In the UK, during the period 1995-99 there were only 315 prosecutions. That seems to indicate a relatively low level in this country, in the light of international comparisons.

David Wilshire: I want to put on the record the fact that I appreciate that the correct information is being made available, as, I am sure, does the whole Committee. I am sure that that is the end of the matter.

Bob Ainsworth: I am grateful for that.
 I want to clarify the issues about which the Committee is falling out. I hope that I am neither the tyrant nor Mr. Softy, and I thank my hon. Friend the Member for Redcar (Vera Baird) for the defence of my position that she has so ably put up. In relation to the two amendments, we are tightening one aspect and loosening another. One amendment applies to concealment, and my hon. Friend was absolutely right to say that there is a negligence test in the existing legislation. The hon. Member for Surrey Heath was right in one of the things that he said—that the provision is principally targeted at the regulated sector—but he undermined his earlier argument that the provision does not apply to the regulated sector alone. As has been said, the existing legislation, which he and his hon. Friend claim to support, contains a negligence test. 
 Moving on to clause 323, the hon. Gentleman is right that the current threshold is higher than that which we propose. However, it does not amount to a negligence test; it is perfectly acceptable, and should not be heightened. I think that I upset the hon. Member for Beaconsfield, which I did not intend to do—I noticed a flash of anger from him for the first time in this Committee—when I accused him of wishing to apply different standards to different people. I like the liberal values that he appears to extol, which, coming from a Conservative Member of Parliament, surprises me. I do not believe that lower standards should be expected of some classes of people. In my experience—I hope that it is experience and not prejudice—in questions of ethics, the standard 
 of the behaviour of people on the shop floor is a darned sight higher than it is from those in the boardroom, by and large. We could justify the idea the other way round, although I accept that everyone needs to be protected by the law. 
 In cases of both possession and concealment, it is reasonable to expect someone with suspicions not to make transactions or continue to possess property without reporting that suspicion. The hon. Member for Beaconsfield seems worried that we are removing sub judice tests, but I do not believe that we are doing that. I am advised that we are not. 
 When we consider clause 324, which is confined entirely to the regulated sector, we shall have to debate whether we should include a negligence test under that clause, and to what degree, if any, we should allow subjective considerations. Although we may differ on those points, I hope that I can move my hon. Friend the Member for Redcar. Perhaps I cannot, but those are important issues. 
 Of course a person is free to argue that they bought property at a house sale, for example. Let us say that someone put an advertisement in the newspaper saying, ''I am going to Australia, everything must go,'' and that someone else got a bargain and bought an item well below its value at that sale. That person could argue that the circumstances were such that they did not suspect and should not be asked questions. That would be a defence, and to suggest otherwise is simply not true.

Nick Hawkins: I am grateful to the Minister for some of the things that he has said. He has quite correctly tried to draw a distinction—as have we—between clauses 321 and 323. I remind him that when my hon. Friend the Member for Beaconsfield was talking about the dangers of a tyrannical approach in legislation, he restricted his remarks to part of one of our amendments.
 The Minister mentioned how surprised he was to hear liberal values from the Conservatives. He is falling into the same trap as the hon. Member for Glasgow, Pollok, who often assumes that all Conservatives have one view. That is just as wrong as the Minister's general views on the boardroom and the shop floor. My experience in this country is that we are incredibly lucky that the standard of ethics and morals, both in the boardroom and on the shop floor, is high—perhaps higher than that in most other developed societies.

Bob Ainsworth: I do not argue with that. I always try to guard against the prejudices with which I may be afflicted. My belief, gained from meeting different people from different places as well as those whom I represent, is that the standards of people on the shop floor are high. Sometimes they pay a price for their honesty in a way that other people do not have to. That is my belief, and I hope that it is not prejudice.
 The amendment does not stand up to the slightest consideration. It is disgraceful that it was even tabled. No one should be allowed to conceal property that 
 they suspect is laundered. The Conservatives are trying to loosen that provision and make it more difficult—almost impossible—to prove such a case, although the amendment to clause 323 might not be quite as bad. There is a subjective defence, and I believe that it is perfectly reasonable to take into account the circumstances in which people suspect. As my hon. Friend the Member for Redcar so ably pointed out, there are circumstances in which that could give rise to an offence.

Stephen Hesford: May I seek clarification, if only for myself? Is the Minister saying that the clause is designed to replace not only the previous legislation but the previous test? I see the official nodding. The previous test was objective. Does the clause reflect a policy decision to weaken the legislation by moving away from what might loosely be termed the negligence approach, so that any court interpreting the measure will be obliged to do so in a subjective way? Is that what the Minister is saying?

Bob Ainsworth: What I am saying, and what I said in my opening remarks, is that in the area covered by clause 323, the current test is based on knowledge. It must be shown that the person had knowledge. [Interruption.]

John McWilliam: Order. I am feeling a bit lonely; I seem to be one of the only two people in the Room listening to the Minister.

Bob Ainsworth: The current test is based on knowledge. The new test is based on knowledge or suspicion. We are tightening that provision and making it easier to mount a prosecution in that regard.
 With regard to the issue of concealment dealt with in clause 321, as my hon. Friend the Member for Redcar quite rightly explained in her jog through previous legislation, the Bill is looser than the existing provisions. There are two separate tests at the moment. For concealment, there is a negligence test, which can be based on knowledge, suspicion or reasonable grounds for suspicion. Currently, it is not even necessary to have suspected—if somebody else thinks that a person ought to have suspected, he is liable to prosecution. We are removing the negligence test, but we are replacing it with one based on knowledge or suspicion. In clause 323 we are tightening the test up, moving from the idea of knowledge to the idea of knowledge or suspicion.

Stephen Hesford: That clarifies a great deal for me, but I ask the Minister for a further clarification. What is the policy thinking behind the two different tests for the two different clauses? Why is a stiffer test considered appropriate for concealment, but a less stiff one considered appropriate for arrangement, as described in clause 322?

Bob Ainsworth: There are no different tests in the Bill. We are getting rid of the different tests contained in the existing legislation. We are proposing to apply the same test to both areas, based on knowledge or
 suspicion of whether one possesses the proceeds of crime or whether one is dealing in or concealing criminal property. We propose that the tests should be the same, and that a person should be liable for prosecution if they know or suspect what they are doing. The fact that they suspected that the property might be the proceeds of crime would have to be shown in court.
 The existing legislation applies two separate and different tests. In the language of the hon. Member for Beaconsfield, it applies a draconian test, which is more draconian than anything that we are proposing in the Bill, as it extends beyond the regulated sector. The provisions on money laundering and concealment currently include a negligence test, which is based on knowledge, suspicion or reasonable grounds to suspect. We are removing that, and by so doing we are loosening it. That is cleaner and tidier, and the two levels of proof required are being brought into line. I have heard no justification for not doing that.

Nick Hawkins: Little did I know when we were all bright-eyed and bushy-tailed at five to 9 this morning that we would debate two single-word amendments for more than three and three quarter hours. I can genuinely say that in almost 10 years in the House, this has been one of the most high quality debates in Committee that I have ever participated in. The hon. Member for Glasgow, Pollok (Mr. Davidson), who has clearly done a lot of research, made a partly humorous but partly serious speech. The Minister is realistic enough to recognise that there are differences of principle involved, and I thank him for the constructive tone in which he responded to the debate. However, fundamental differences exist between our points of view.
 It would not be sensible or proper to respond to all the issues that have been raised. Almost every member of the Committee who attended today has spoken; it may be the first time in the long history of this Committee stage that that has happened. All the contributions have been sensible, helpful and worth listening to, although many differences of view have arisen. At one stage this morning there was a clear difference, in emphasis if not in view, between the hon. Members for Wellingborough (Mr. Stinchcombe) and for Wrexham. There are clearly huge differences between the hon. Members for Glasgow, Anniesland and for Glasgow, Pollok on the one hand and the hon. Member for Redcar on the other, in their entire approach to this type of legislation. As Ministers in all Governments so often do, the Minister has driven a middle course between the extremes of his party. 
 Even though the two amendments, which are linked together, have different effects—and I do not wholly share the Minister's interpretation in that regard—we would like to vote on each of them separately. Different principles are involved, but we have covered the matter exhaustively. I could say many things in response, but several of them have been dealt with in interventions. We shall have to return to some of those issues, and others connected to them, such as de minimis provisions, when we come to later amendments and the clause 323 stand part debate. 
 At this stage, I simply want to support the arguments of my hon. Friends the Members for Beaconsfield, for Cities of London and Westminster (Mr. Field), for Henley and for Spelthorne (Mr. Wilshire). It will be helpful if we vote, because these issues will be equally exhaustively debated, along with the rest of part 7, in another place and on Report. 
 Question put, That the amendment be made:—
The Committee divided: Ayes 7, Noes 12.

Question accordingly negatived. 
 Clause 321 ordered to stand part of the Bill.

Clause 322 - Arrangements

Nick Hawkins: I beg to move amendment No. 518, in page 186, line 39, at end add—
'(d) the amount of money involved in the arrangement or the value of the property does not exceed £1,000'.

John McWilliam: With this it will be convenient to take the following amendments: No. 519, in clause 323, page 187, line 14, at end insert—
'(e) the value of the property involved does not exceed £1,000'.
 No. 520, in clause 324, page 187, line 41, at end insert— 
'(c) the amount of money involved does not exceed £1,000'.
 No. 521, in clause 325, page 188, line 40, at end insert— 
'(d) the disclosure relates to money or property not exceeding the value of £1,000'.

Nick Hawkins: I showed some prescience, although not to the extent of guessing how long we would take, in saying that I thought that although each amendment would have added only one word, there would be detailed arguments of principle on the previous group of amendments. I am reminded of one of my few personal contributions to criminal law. In my first Parliament, Mr. Peter Butler, the then Member for Milton Keynes, North-East, and I tabled an amendment to what in 1993 was the Criminal Justice and Public Order Bill. After the word ''coat'', it inserted the word ''hat'', so that police officers could search under people's hats—and they can do so now, because the Bill, including that amendment, was made law. That was especially relevant in terms of drug searches of those of a Rastafarian persuasion.
 I hope that the hon. Member for Glasgow, Pollok will bear that in mind when he accuses me and many of my hon. Friends of constantly wanting to water down the law down on drugs: one of the few amendments that I can claim to have made to the law in nearly 10 years in the House toughened up a previous Bill on the subject.

Ian Davidson: Presumably the hon. Gentleman wants to be tough on Rastafarians and tough on the causes of Rastafarians.

Nick Hawkins: Not on the causes of Rastafarians—but I have always claimed to be tough on crime and tough on the causes of crime, as my record during the past nearly 10 years shows. That is a side issue that I must not pursue further, Mr. McWilliam, or you will rule me out of order.
 We are now on to the de minimis provisions, which I touched on with a few words before we voted. My hon. Friend the Member for Beaconsfield and I have had extensive discussions with experts on the subject, especially members of the anti-money-laundering committee of the Law Society. Despite the views of some Labour Members, many people engaged professionally in the City of London—lawyers, accountants, tax advisers and others—are as opposed to money laundering as the hon. Member for Glasgow, Pollok. They would agree with nearly everything that he said in the serious part of his speech on the previous group of amendments. 
 Those people want the Bill to be effective. As recently as Monday lunchtime, they specifically told my hon. Friend and me that they did not want provisions so ridiculously onerous that huge amounts of time would be wasted on reports to organisations such as the National Criminal Intelligence Service on the tiniest matters. That is the only reason why we want to insert a de minimis provision. 
 I shall not fall out with the Government if the Minister claims that £1,000 is too high, and that NCIS says that a de minimis provision of no more than £500 would be sensible. My hon. Friend and I had to consider the figure carefully, and that was the decision at which we arrived. I hope that the Minister and Labour Members do us the honour of accepting that we have not tabled the amendment to seek to water down the legislation. We want organisations that are professionally involved in finance in places such as the City of London to concentrate on what is effective against serious and organised crime. 
 I do not believe that the Minister will be able to tell the Committee that NCIS will have the resources to cope daily with huge numbers of reports from every financial institution in the City of London about what they might think is dodgy, when the sums involved are tiny. It was suggested to us that if the Bill were enacted unamended, firms of solicitors in the City of London would think that the only way to protect themselves from allegations would be to have vast departments that reported almost everything. The same would 
 apply to tax advisers and those in financial services and banking, where I used to work as a corporate in-house counsel. 
 That is not to say that everything is riddled with crime but, using 20:20 hindsight, a legitimate firm that carries out legitimate business might be worried that if it had not made a report to make itself safe, someone might come along later and say, ''This turned out to be dodgy even though the amounts were tidy. You should have reported it.'' In the late 1980s, I saw the growth within financial services of a whole new industry called ''compliance''. As a result of various scandals, the previous Conservative Government rightly introduced regulatory provisions, although they were very complex. All the reputable institutions set up vast compliance departments. 
 I shall anticipate the hon. Member for Glasgow, Pollok by making the criticism that the legislation and regulations that my party introduced in government—but before I was a Member of Parliament—were over-complex. At one stage, the plc for which I worked dealt with five different regulatory bodies with competing rule books. We used to have something called regulatory arbitrage, when we would decide whose overly draconian rule book to row about. The whole process eventually ground to a halt, and all the arrangements were changed during my first term in Parliament—under the Conservative Government—and during this Government's first term. 
 I was fascinated, as other hon. Members may have been, to see a half-inch thick book in my parliamentary post this morning. It introduced the latest update from the Financial Services Authority. I have not yet had time to read it, because the Committee started as 8.55 am, but it completely reverses a doctrine called polarisation. I shall not bore members of the Committee with all the implications of polarisation, but it may be familiar to some of them. However, the change represents a complete reversal. When the Government came to power in 1997, various Ministers made statements about how they would carry on with the polarisation regime. I have always taken an interest in the issue—and I know from our time together on the all-party group on insurance and financial services that you have, too, Mr. McWilliam. There has been a major change. 
 I make that point to convince sceptical Labour Back Benchers—as I seek to all the time—that we genuinely want the Bill to work. We have never said that the Government are completely wrong to introduce their provisions—not on Second Reading, not when we responded to the drafts before the Bill saw the light of day, and not in Committee. We are trying to end up with a workable Bill because that is the point of the Committee system. I hope that the Minister will respond constructively to the introduction of de minimis provisions so that we can at least discuss whether it is sensible to have a limit below which reporting should not take place. 
 Mr. Davidson: If the minimum sum that must be notified is £1,000, is there anything in the amendments to prevent someone from coming along with £999.99 on several different occasions?

Nick Hawkins: That, I understand, is a problem. The hon. Gentleman is right, which is why I said that I was not going nap on a particular figure. If he suggested a figure of £500, that would be fine. It would be perfectly acceptable for the Minister to table a Government amendment to deal with the issue. Before I tabled my amendments, I wondered whether one could deal with the sequential problem, because I do not want to open the floodgates either.
 The spirit of the amendment is clear. We do not want organisations such as NCIS to be flooded, or entirely reputable organisations to have to set up vast and expensive departments and pass the cost on to customers, because huge amounts of business would probably flow out of the UK. In his remarks on the previous amendments, the hon. Gentleman attacked one offshore jurisdiction and said that all sorts of dodgy things happened there. I am sure that he does not want a huge number of jobs to be exported elsewhere. This is not an anti-foreign thing, because whatever part of the country we represent, our job as Members of Parliament is to help the UK to remain a successful financial centre. That is important, and jobs in the hon. Gentleman's constituency may well depend on us doing that, just as they do in mine. 
 I have said enough. Again, there are wide implications. I wonder whether the nearly four hours of debate on the two words of the previous amendment would qualify us for a place in the ''Guinness Book of Records''. That is all I need to say.

John McWilliam: Order. It does not qualify. I had to sit through the debate on the John Golding amendment, which lasted for 12 hours.

George Foulkes: My colleagues and I think that it is about time that I emerged from my slough of indolence to help my hon. Friend. He has done a sterling and tremendous job in dealing with amendments today, and also earlier in the week, when I was away.

John McWilliam: Order. I hope that my good friend Mrs. Foulkes has not been writing to the other members of the Committee.

George Foulkes: That is an interesting proposition, but I shall not go into too much detail.
 Like the hon. Member for Surrey, East—

Nick Hawkins: Surrey Heath. There is an East Surrey.

George Foulkes: I am sorry, I meant to say Surrey Heath.
 When I arrived, bright-eyed and bushy-tailed at 8.55 am, little did I know that it would be after 4 pm before we would reach the amendments now before us. However, like the hon. Member for Surrey Heath, I agree that the previous debate was worth hearing, and 
 I was here for almost all of it. I hope that this debate will not be as long—we do not want a competition—but I hope that it will be as useful and constructive. 
 I am sorry to disappoint the hon. Gentleman by saying that his is a watering down amendment. My hon. Friend the Member for Glasgow, Pollok and others will agree that yet another Conservative amendment would make life easier for money launderers. I remind the Committee of what my hon. Friend the Under-Secretary said earlier. We are dealing with a huge problem—the Financial Action Task Force reckons that money laundering accounts for between 2 and 5 per cent. of gross domestic product. It is a huge amount of money, and the nit-picking of Opposition Members, their detailed questions and their legal points suggest that they do not fully understand and appreciate its extent.

Dominic Grieve: I do not have access to the intelligence, so I have to take the Minister's word for it that the problem is as large as he says. One of the difficulties is that despite the size of the problem, the number of prosecutions brought under the old legislation seems not to be so dramatically different from under the new, and there has been a remarkable paucity of such prosecutions. The Minister should understand that it is not necessarily a question of watering down, but of how to make the best use of the available resources. One of the questions is whether, by insisting on the disclosure of multiple minute sums, we would be helping in that important process.

George Foulkes: I shall come to that, as the hon. Gentleman would expect. Sometimes, as during the previous debate, there are too many interventions, and although they make the debates lively they do not allow a Minister—or the Opposition spokesmen—to argue in a sustained and reasoned way. I shall answer that point and the point made by the hon. Member for Surrey Heath—

Ian Davidson: Will my hon. Friend give way?

George Foulkes: What I am about to say is of particular interest to my hon. Friend the Member for Glasgow, Pollock and the other Scottish Members on both sides of the Committee. My hon. Friend the Under-Secretary said that provisional figures for 2000 showed 118 prosecutions in England and Wales for alleged money laundering offences, but that in Scotland there had been none to date, which is why there have been no convictions. That may be why those who represent Scottish constituencies feel strongly that the Bill needs strengthening to be more powerful and effective.

John Robertson: May I give my hon. Friend some information, again from Strathclyde police? They have tried to prosecute people but they consistently come up against brick walls in trying to get those people into court. I am greatly looking forward to the enactment of this Bill, so that they can at last address some of the problems in Scotland.

George Foulkes: My hon. Friend is right. He and I attended a presentation by the Scottish Office of NCIS with the Scottish Drug Enforcement Agency. We
 heard about their plans for setting up a new money laundering unit in their offices in Paisley and we were very encouraged. We received a very positive response to the Government's proposals.

Mark Lazarowicz: May I put it to my hon. Friend that there may be another explanation for the fact that there has been no necessity to use the money-laundering legislation in Scotland? Perhaps the standards of probity in the Scottish financial sector, much of which is located in my constituency, are much higher than those that, unfortunately, we have come to associate with some elements of the City of London.

George Foulkes: If I represented Edinburgh, North and Leith I would put forward that argument too, and I can understand why my hon. Friend is doing so. As a Scotsman, I would like to think that it was true. However, there is no evidence that we can adduce for it. It would be naive and complacent of us to assume that there are not cases in Scotland that need to be pursued, as there are south of the border.

Ian Davidson: May I ask the Minister to reflect on the point that he made when he mentioned that the Conservatives have yet again voted to weaken the legislation? Is he aware that of the three Liberals, only one is present, and with both his minds he, too, voted to weaken the legislation? That makes it even more unfortunate that the nationalists did not ask for a place on this Committee. We should have been able to see whether they would vote to weaken the legislation or to toughen it up.

John McWilliam: Order. Before I call the Minister again, could we perhaps think about getting back to the amendment, because we seem to have moved rather a long way from it?

George Foulkes: That is exactly what I am going to do, Mr. McWilliam. My hon. Friend's point was powerful, but he has made it and I do not need to reinforce it.
 I can tell the hon. Member for Surrey Heath that we oppose the minimum threshold, and I can give him three reasons. I hope that they will convince, if not the hon. Member for Surrey Heath, at least other Committee members. First, there are no such thresholds in the existing money laundering offences, or in the existing offence of failing to report laundering of drug money. My hon. Friend the Under-Secretary and I have seen no evidence that the absence of monetary thresholds has resulted in unfair or oppressive prosecution of trivial cases. If Opposition Members have any evidence, I should like to hear it.

Nick Hawkins: I said in opening that my hon. Friend the Member for Beaconsfield and I have had powerful submissions made to us to the effect that if this new Bill, which the Minister obviously hopes will soon become an Act, goes through without de minimis provisions, the consequences that I spoke of will flow. Those are not made lightly. A formal meeting was
 convened with us involving, as I mentioned, both leading representatives of the Law Society of England and Wales and leading practitioners in the field.

George Foulkes: I accept that, and I know that those meetings have taken place. That does not answer my question. Did any of the people at those meetings give any evidence whatever that the absence of monetary thresholds in the existing legislation has resulted in unfair or oppressive prosecution in trivial cases?

Dominic Grieve: I think that the answer is yes. I touched on that earlier in the debate. The amount of disclosure to NCIS that may have to be made in relation to trivial matters is causing particular difficulties, especially because there is not an adequate response from that organisation as to what solicitors should do next.
 Let us suppose that a solicitor is carrying out a property transaction and he notifies NCIS that he has suspicions about it. The value of that transaction may be above the £1,000 threshold—it may be a huge transaction—but the solicitor is unable to take the matter any further because he is not told what to do. He cannot tell his client what is going on because to do so would be tipping off. He is left in limbo. From the solicitor's point of view, if there is no de minimis provision, the situation will be much more difficult because the problem could apply to a huge number of transactions and activities. If the Minister can reassure us that telephone guidance as to the next step will always be available from NCIS, some aspects of the provision would cease to be such a problem. Otherwise, a de minimis rule would help to alleviate that difficulty. If—

John McWilliam: Order. I shall introduce a de minimis rule on interventions.

George Foulkes: I was thinking that myself, Mr. McWilliam. You read my mind. Even though the hon. Gentleman's answer was long, it did not deal with the issue.

Dominic Grieve: Yes it did.

George Foulkes: No, it did not. The hon. Gentleman dealt with the extra burden, concern and uncertainty for solicitors. However, my question was whether the absence of monetary thresholds had resulted in unfair or oppressive prosecution in trivial cases. We do not think that it has.
 I want to deal with the particular point about the difficulties and volume of reporting. We accept that there is a compliance cost to the industry, but that can be exaggerated. A report could be sent electronically—by e-mail, for example— under systems that NCIS has developed in partnership with the industry. NCIS is very co-operative and collaborates with the industry to make reporting easier.

Dominic Grieve: The issue is not only about the cost of notification. There may well be e-mails and other methods of sending reports. However, there is also an economic cost, and ultimately a professional cost. Once that situation has arisen, the transaction or
 activity is sterilised until such time as a go-ahead is given, and the evidence that we were presented with was that those go-aheads are not given. The ball is thrown back into the court of the legal adviser or representative, who is told, ''It's your problem—you decide what to do.''
 That state of affairs is unsatisfactory. By introducing a de minimis provision, at least the burden on NCIS would be alleviated, which may enable it to respond adequately to the problems with which it is presented.

George Foulkes: A de minimis provision may alleviate the burden on solicitors, but it will not help NCIS when it gathers information. I will talk in a moment about the importance of information gathering in criminal intelligence work. It is vital in pursuing such matters.

Nick Hawkins: Just before the Minister responded to the intervention by my hon. Friend the Member for Beaconsfield, he claimed that NCIS has already developed systems that work with the industry. We are being told, as a matter of fact, that reputable firms that make those reports are left in limbo because NCIS does not respond. Clearly the Minister's brief tells him something else, but we are telling him that that is the experience of City firms. They make a report to NCIS and answer comes there none. The firm is left in limbo and transactions are frozen in aspic. Will he talk to his officials and find out why that is happening?

George Foulkes: It is not unknown for there to be two interpretations of what is happening. A solicitor may have a different interpretation about the speed of response and the way in which it is made from that of NCIS. When I visited the NCIS office in Scotland, I was impressed by the operation. My hon. Friend the Under-Secretary and his officials have been in very close contact with NCIS in relation to those procedures—but I will pick up the point that the hon. Gentleman has made.
 It has also been argued that existing money laundering offences have a threshold of seriousness that the Bill would remove, and that a financial threshold is required to replace that. However, the fact remains that it is already an offence to launder the proceeds of minor offences such as shoplifting. The proceeds of such offences, and even of more serious offences such as drug trafficking, are sometimes very small amounts. Although the offences may be serious, the financial amounts involved may be relatively small. I therefore do not accept that the inclusion of the proceeds of additional summary offences within the scope of money laundering creates new circumstances that demand a financial threshold. 
 Secondly, the advice that the Government have consistently received from the law enforcement community is that criminals will inevitably exploit minimum thresholds, as my hon. Friend the Member for Glasgow, Pollok perceived in an earlier intervention. The inconvenience to such criminals of breaking down a sum of £20,000 or even £50,000 into slightly more than 20 or 50 packets that fall below the threshold is far outweighed by the benefit that they 
 derive in terms of immunity from prosecution. [Interruption.] The Conservatives are chattering among themselves, not paying attention.

Nick Hawkins: On a point of order, Mr. McWilliam. Unlike a former President of the United States, I can walk and chew gum at the same time. I can have one ear listening to the Minister while having a brief but urgent discussion with one of my hon. Friends.

George Foulkes: I accept that, but I warn the hon. Gentleman against trying any pretzels, because that can be dangerous.

John Robertson: I do not know what my hon. Friend thinks about walking and chewing gum, but perhaps he opens his mouth only to change feet.

George Foulkes: At least that has given the Opposition spokesmen some time in which to sort out their problem so that they can consider an important point that relates to how criminals could break up such sums in order to secure immunity from prosecution. A de minimis provision would give criminals the opportunity, especially if the level were £1,000, to secure that immunity from prosecution and reduce the likelihood of being reported on by those who handle their money for them.
Mr. Hawkins rose—

George Foulkes: In a moment. It is better to give way at a logical point, such as the end of a sentence or paragraph. That makes what is said more understandable, and easier for Hansard, too—I like to look after the interests of the workers. The form of evasion that my hon. Friend the Member for Glasgow, Pollok and I describe is a genuine phenomenon known internationally as smurfing. I am sure that that will add to his knowledge. I have now finished my sentence.

Nick Hawkins: I am grateful to the Minister. I believe that he had finished a different sentence from the one on which I intervened. The fact that after having said that he would not take my intervention he moved on to an entirely different subject in order to pass information on to the hon. Member for Glasgow, Pollok perhaps proves my point that he had paused for breath at the end of what I understood to be a phrase. I, too, want to look after the workers, especially at Hansard, to whom we all pay tribute.
 The Minister said, ''Especially if the level were £1,000.'' I said in moving the amendment that we shall not go nap on a particular level: the Minister could introduce a Government amendment to make it £500 or £250. We simply want to establish the point that no one should be subject to huge burdens for an amount that is not regarded as serious. Worryingly, the Minister referred earlier to laundering in relation to minor offences such as shoplifting. Surely that is not what the Bill is targeted at.

George Foulkes: I gave way to the hon. Gentleman at the right time, because his intervention brings me to my third point on why we reject the amendment.
 There is no doubt in our mind that even small—very small, in some cases—transactions can provide vital leads on money laundering. The National Criminal Intelligence Service has the necessary systems and analytical tools to make use of all the reports that it receives. The hon. Gentleman was worried about wasting the time of NCIS through the volume of reports that it receives. Our officials have discussed extensively with NCIS the possible increase in work load, and we are assured that it can cope with the increase. It considers that it would be far better for it to have the opportunity to dismiss a report as relating only to a minor crime than to risk losing an important money laundering lead. I hope that my argument has convinced Opposition Members.

Nick Hawkins: It would be a convincing argument if we were being told by the industry that NCIS was, even given its current much lower work load than that envisaged by the Bill, responding to dismiss minor reports. The clear information that we received—I cannot stress how strongly it was put to us—is that NCIS is not responding. It is leaving the professionals in limbo.

George Foulkes: That is the third time that the hon. Gentleman has raised that matter. When he referred to it the second time, I said that we would take it on board and consider it. I hope that he will not raise the matter a fourth time. If transactions or assets are suspect, it is right that they should be reported. More reporting does not mean that all reports will lead to a prosecution. The usual public interest considerations that we have discussed and the limitations on the resources of law enforcement and prosecution agencies will, of course, continue to guide decisions about when to initiate criminal proceedings. Nevertheless, reporting is vital.
 The Government remain unconvinced by the calls for minimum thresholds, even if they are set at £1,000. It is difficult to justify introducing artificial limits to such offences. Such a provision would work against the policy that we are trying to achieve under the Bill. Moreover, it would make it easier for criminals to launder the proceeds of crime, a matter that my hon. Friends and I are worried about. It looks again as though the Opposition are trying to make it easier for criminals. 
 Amendment No. 521 is especially unpersuasive. It would introduce a minimum threshold into the tipping off offence under clause 325 with which we shall deal next week—or perhaps the week after. [Laughter.] I just remembered clause 324. The tipping off offence applies only if a person has found it necessary to report a suspect transaction. It cannot be right that anyone should jeopardise an investigation that may follow that disclosure. The tipping off offence already contains safeguards. It applies only to disclosures that are likely to prejudice an investigation and there is a defence if the person in question did not know or suspect that the disclosure would be prejudicial. In 
 light of what I hope have been convincing arguments, I urge Opposition Members not to press the amendment.

Dominic Grieve: I agree with what the Minister said about amendment No. 521. It was an attempt to look across the board of part 7 at those areas where minimum provision should be provided, but he advanced a cogent argument why such matters should not apply in the case of the amendment. We shall not press it to a Division.
 I turn now to the response to amendment No. 518. We want money laundering to be suppressed, but we are concerned about the administrative burden that may be placed on those who have to carry out the reporting system, which is backed up by a major criminal sanction of 14 years imprisonment on indictment. To that extent, it places a burden on individuals and organisations. While, I accept—well, the Minister made the point so I suppose that I must accept it—that he is looking at the Bill in the context of financial organisations, solicitors' firms and other ''City'' activities, the net has been cast wide and it applies beyond such organisations and the regulated financial sector. 
 At what point should an individual start to worry about the provenance of money that he is given? Clearly, in that context, the amount is relevant. If the Minister of State offers me £25,000 in cash as payment for an item, I might be alerted to something unusual, because as we have discussed, most people do not carry £25,000 in cash. If he offers me a £5 note for an item that is worth £5, that cash transaction is unlikely to excite any anxiety or suspicion. 
 I simply say to the Minister that if we do not have a de minimis provision, a considerable burden will be placed on individuals in small-value transactions. Many such transactions are likely to be outside the regulated financial sector and may involve individuals who would not have read the part 7 or be aware of how to ring up NCIS. What publicity do the Government plan to give to the Bill to inform the wider public that they would be subject to severe criminal sanctions if they were not constantly on alert for these problems during transactions? 
 One of two things seems likely. In reality, notwithstanding the Minister's arguments about minimum provisions, NCIS will have neither the time nor the desire to lay its hands on the information, or certainly to bring criminal sanctions on those involved who did not comply in transactions that involved minuscule sums. That is the most likely outcome. The alternative outcome is that many people will be in serious jeopardy of criminal prosecution because they had not made declarations for transactions that may have seemed a little odd but were forgotten about because the sum was so trivial. Such triviality and the small quantity of the sum are clearly legitimate and compelling reasons why a person may dismiss suspicions. 
 Mr. Paul Stinchcombe (Wellingborough): I appreciate the eloquent point that the hon. Gentleman makes. However, he is aware that the principal vice of the amendment is that it could be evaded so easily. The hon. Member for Surrey Heath acknowledged that Conservative spokesmen were aware of that when the amendment was tabled. Has the hon. Member for Beaconsfield thought of a solution to that problem? If he has, what is it, and if he has not and cannot, will he still support the amendment?

Dominic Grieve: There are several ways in which that could be addressed. The amount could be reduced, and I am bound to say that there is a point at which the Minister's objection ceases to be valid. If the minimum amount were £250, the evasion would have to be convoluted if it were to be realised.
 A further alternative would be to draft an amendment that provided for a de minimis provision but provided that if transactions were linked and their aggregate total was more than £1,000, they should be declared. 
 I am prepared to accept such ideas, but I continue to be concerned about a blanket legal requirement that starts at a halfpenny. That is what we are talking about, because that is the smallest monetary consideration available in our currency—and it might be even smaller than that in some foreign currencies. The Minister must address that. He is aware of my anxiety about discretion. He has repeatedly told the Committee that provisions will be enforced with discretion, so nobody needs to worry.

George Foulkes: Did the hon. Gentleman not hear me say that there are other constraints? There are public interest considerations, and there are considerations with regard to the resources of the prosecution authority. Nobody will pursue a halfpenny—although I think that the sum would now have to be a penny before it was legally possible to do that.
 The hon. Gentleman's argument is making a mockery of the situation. It is a reductio ad absurdum. [Hon. Members: ''Oh.''] I hope that I got that right.

John McWilliam: Order. The Minister is all right. So long as the Chair understands what he is saying, it is in order.

Dominic Grieve: The Minister cannot have it both ways. On the one hand, we are given the impression that NCIS is saying that it might want to know about even the smallest transaction about which there are suspicions—which expresses the Big Brother attitude of wanting to know everything. On the other hand, he is saying that NCIS would not bother to prosecute if it discovered that someone had suspicions about a minor transaction but did not report them. I am unsure whether that would be the case. If it is so important for NCIS to hear about a £5 transaction, and someone does not tell them about it, that person might be in jeopardy. I find his argument difficult to follow.
 My hon. Friends and I have been guided by representations that we have received about the administrative burdens and problems that will be placed on legitimate organisations, companies and 
 individuals, and about the stress and anxiety that people could experience if they have to think, ''What should I do in this situation?'' 
 The Minister must bear it in mind that, in a legitimate business environment, the clients are entitled to confidentiality. [Hon. Members: ''Oh.''] That is an important point. Human relationships are dependent on the ability to maintain confidentiality. We have to do that all the time, in a family setting, and in others—although I hope that such a setting would never involve the commission of crime. 
 Clients normally assume that they are entitled to confidentiality when they are dealing with professional advisers. The point has been made that some companies are putting up notices saying, ''Clients must understand that if we receive information that indicates that they might be committing a criminal offence, or that money laundering may be going on, we will tell the authorities.'' I accept that that is a proper step to take, but it is a departure from the normal practices of commercial confidence—and in particular from the usual practice when clients are dealing with people from whom they would normally have a commercial right to expect that confidence. 
 At what point should that be departed from? With regard to tiny transactions, it is difficult to see how it could be departed from. Professional people would bear a heavy burden in such circumstances. The small size of the transaction would tend to dispel any suspicion that it might be illegitimate. 
 It should be possible to decide on a cut-off point, where one can say, ''If we are concerning ourselves with this, the system is getting out of control,'' because otherwise we would be demanding of people the constant revelation to the state authority of information that goes beyond the bounds of what is reasonable or proper for the prevention of crime. 
 Therefore, a philosophical issue is at stake, even though the principle of the requirement to give such information is a departure from the practice that existed prior to the passing of the earlier legislation. I can see the reasons behind that departure, although I do not welcome the fact that our society has got to such a pass that we have had to do that. It is a necessity. I am not saying that it is an unmitigated good—it is not. When it is extended to any transaction of any size, including minute ones—if the Minister thinks that £1,000 is too much, I am happy to consider a lesser figure—it approaches the borders of unreasonableness. At that point, I begin to think that the amendment has force, subject to what the hon. Member for Wellingborough said about a series of linked transactions. I accept that that could be a major loophole, which would have to be plugged.

Vera Baird: I appreciate why the hon. Member for Beaconsfield is concentrating on clause 324, in relation to which his argument may have more force, although not as much as he thinks. I am very worried that, under amendments Nos. 518 and 519, somebody who knows that they are dealing with criminal property would not be committing a crime if its value is £999.99. However, if its value was a penny more, a crime would be committed. Whatever the figure, that is a ludicrous
 basis on which to allocate criminality. I defy him to point to another example of that in English law—or Scots law.

Mark Field: We have had a long debate on the matter, and I fully appreciate the concerns of the Minister and other Labour Members that we would be turning a blind eye to criminality by implementing such an amendment. However, the arguments made by both my hon. Friends have a certain amount of force. Dare I say that, in part, the Minister implicitly accepts that a blind eye will not be turned to such very small sums, but that the full weight of the investigative body will not be exerted on individuals in relation to relatively small sums.
 To draw an analogy, it would be interesting to know how many prosecutions have taken place in relation to sums of up to £1,000. It would be useful to have such statistics ready when the Minister sums up. We have already espoused our concern—which we shall no doubt reiterate at length on Tuesday, when we consider other aspects of part 7—that there is a real risk that an enormous regulatory and compliance burden would be imposed on financial institutions in the City of London. That would worry me, especially if firms of solicitors and accountants were required to account for every last transaction. The whole process might collapse if we are not careful. The real risk would then be that the money laundering provisions, which are important, would come into disrepute. 
 The Minister has already said, in part, that small sums would not be investigated. Would the level be fixed at below, say, £1,000, or £500, or indeed £5,000? If we are to tackle the real Mr. Bigs effectively, it would be a crying shame if the entire process were to be strangled by bureaucratic paperwork, which would be imposed on the regulated sector, and to an extent the unregulated sector. I would be grateful for guidance from the Minister, as a de minimis provision would be sensible. 
 Another alternative might be not to include such a provision in the Bill but to ensure that it is understood through a nod and a wink, or through annual or bi-annual guidance notes from the agency to the regulated sector. Hon. Members of all parties would think it a crying shame if a massive burden of regulation were so to drown the compliance and regulation officers that the real criminals that we are trying to bring to book escaped.

Ian Davidson: It is interesting that the initial argument advanced in favour of the amendment concerned reducing the burden of work involved, yet when we moved on in the discussion, the hon. Member for Beaconsfield—not for the first time—let the cat out of the bag and started to raise issues of Big Brother and confidentiality. He was almost arguing that it is an Englishman's right and privilege to fiddle his taxes by keeping his accounts secret.
 The point that was made about confidentiality seems absurd. It is not for a moment being suggested that every disclosure would be published in the equivalent of the Evening Times to be seen by all and sundry. Disclosures would be kept within a strictly regulated, confidential crime-fighting mechanism. Breach of confidentiality would therefore be minimal. Emotive terms such as Big Brother smack of the ''sneaking'' defence, which was advanced by the hon. Member for Henley before he had to go off and sell his papers. 
 I draw to the Minister's attention the letter from the Law Society of England and Wales to which I referred earlier. It suggests a standard phrase to be included in a client care letter. I quoted it earlier, but it is also relevant now: 
 ''For the protection of our clients we operate a money-laundering reporting procedure. In certain circumstances, information will be revealed by us to the appropriate authorities in relation to any suspicion of money laundering.'' 
I cannot understand why any honest person dealing with a respectable legal practice would have any reservations about that sub-policy.

Nick Hawkins: Will the Minister give way?

Ian Davidson: Gosh. Is the hon. Gentleman better informed than me?

Nick Hawkins: I hope for the hon. Gentleman's sake that I am being prescient again, but I suspect that it is the time of the afternoon.

Mark Field: Will my hon. Friend give way?

Nick Hawkins: No. I am intervening.

John McWilliam: Order. There cannot be an intervention on an intervention.

Nick Hawkins: Nothing would give me greater pleasure than if the hon. Member for Glasgow, Pollok were made a Minister, although I hope that his Government's tenure will be limited.
 Is the hon. Gentleman criticising what the Law Society of England and Wales put on their website or, as I think, is he beginning to recognise that the Law Society of England and Wales is behaving perfectly properly? That would stand slightly at odds with his usual wholesale criticism of all lawyers as crooks and shysters.

Ian Davidson: I do not think that all lawyers are crooks and shysters, and not just because some of them are good lawyers. Some of them have standards of probity. [Interruption.] Shall I wait until the hon. Gentleman has finished his conversation?
Mr. Hawkins indicated dissent.

Ian Davidson: I think that what the Law Society is advancing as good practice is exactly that. If lawyers operated to the standards to which the Law Society pretends and suggests that they do, many of our problems would be overcome. However, many lawyers are seduced by the prospects of the rich pickings to be made through dealing with criminals and being
 prepared to co-operate in laundering money on their behalf. I hope that that is sufficiently unsubtle for the hon. Gentleman to comprehend.

Nick Hawkins: It is certainly unsubtle. I can accuse the hon. Gentleman of many things, but rarely of subtlety. The Under-Secretary accused me of being—or correctly described me as—blunt. I hope that I can be as blunt as the hon. Gentleman. I think that he is relating his experiences north of the border, and in particular his experience of his area, as he often does. I wonder whether he means to praise the Law Society of England and Wales but attack the solicitors who operate under the Law Society of Scotland. I am not sure that he does.

Ian Davidson: That is disingenuous. The hon. Gentleman knows full well that I am saying that the guidelines of the Law Society, if operated in practice, would overcome many of the problems. The reality is that the Law Society of England and Wales and the Law Society of Scotland are either unable or unwilling to police their members to an appropriate standard, so the legal authorities have to do it for them.
 Does the Minister accept that resources must be considered? I have spoken, along with several colleagues, to Strathclyde police and to representatives of other authorities. They are worried about resources. There are several individuals who they are well aware that they would wish to target and pursue, but they are worried that they will not have the resources to undertake such action adequately. I hope that my hon. Friend will give me assurances further to those that he has given in writing already that such matters will be considered as a priority. 
 I also draw the Minister's attention to the press release of the Serious Fraud Office, which I am unable to lay my hands on at the moment. The gist of it was that one of the major difficulties faced by the SFO was precisely the practice of smurfing to which he referred. With modern electronic technology, it is possible for people to move small sums around the world in different ways—the payments being made from funny banks to respectable banks to circulate the money—and once money gets into the system, modern technology can make it much easier for it to be dispersed. 
 The issues of smurfing and small amounts are essential. We cannot allow, as my hon. Friend the Member for Redcar said, offences to be committed for £1,000 but not for £999.99. While there is some merit in the Conservative Members' argument, yet again the effective result of their proposal would be to act as the criminals' friend—the launderers' friend—and allow people to get away with practices that would otherwise be tort. I do want to be unduly critical of hon. Gentlemen, but only when they deserve it.

Nick Hawkins: Accepting as I did the argument of the hon. Member for Redcar about a particular level, would the hon. Gentleman be less unhappy if we discussed a de minimis limit of £250 or £200? I am being serious.
 Mr. Davidson: I understand the hon. Gentleman's point, but the principle of an offence being committed for £250, but not for £249.99, in multiple doses, as it were, would not deal with smurfing. Like him, I want the provision to work. I recognise the problem of bureaucracy and burdens on business. I referred to a list of banks earlier, but because such people cannot be trusted to police themselves, we must adopt an unfortunate mechanism. If banks, lawyers and accountants operated informal systems that were so rigorous that virtually all criminals were deterred, the number of cases that required to be reported would be minimal. Few occasions would arise when efforts were made to get money into the system.
 The fact is that that is not happening. Solicitors and others have got themselves into the position of creating so much public mistrust that we are required to take action that, regrettably, will place a heavy burden on them. I do not think that hon. Gentlemen have responded adequately to the point, as a result of which I shall be forced to support the Government, even though I recognise that their argument is a difficult and almost undesirable approach to take.

Nick Hawkins: I do not know whether I understand what the hon. Gentleman says. Would he be persuaded if I conjured up out of the ether clear evidence for him before our next sitting—I suspect that I would be able to do that if I had to—of how many reputable organisations produce such reports under the current legislation? Would he be persuaded that the system results in many reports from many reputable institutions? He suggests that the bodies cannot police themselves and that that never happens. Would he be convinced if I gave him evidence that it does happen and that the unamended provision would make the burden 10 times worse?

Ian Davidson: By all means, the hon. Gentleman can produce the information. If I think that it is helpful and I am shown that the resourcing that is provided now and in the future would be unable to cope, that would influence my view. I am interested in anything that he can produce in the context of how the Minister tells us that we will deal with the pressures.

George Foulkes: I hope to be able to deal with the debate tonight. I can be brief and comprehensive at the same time, although I do not know about anyone else.
 I can assure my hon. Friend that we are examining the resources both north and south of the border and we bear in mind the worries that he and others expressed. It is right and proper that the Law Society publishes guidelines, and such guidelines have been published by many organisations that contain members that encounter money laundering during their work. However, we expect all members of such organisations to pay close attention to the guidelines and to adhere to them. 
 The hon. Member for Surrey Heath made a point on three occasions. Ninety-eight per cent. of cases that are received are reactive rather than proactive. In other words, consent is sought in only very few cases. NCIS responds as promptly as possible to cases in which consent is sought. However, NCIS has assured us that 
 it is willing to discuss any problems that arise with the organisations concerned. I hope that such meetings will follow on from the points that the hon. Gentleman helpfully raised.

Nick Hawkins: I am grateful to the Minister for that. Following further inquiries of NCIS by his officials, it would be helpful if he could tell us by next Thursday—we will not deal with all of part 7 tonight—how many outstanding reports led to delays that were greater than 72 hours before NCIS reported back.

George Foulkes: We shall have other opportunities to discuss many aspects of part 7. My hon. Friend the Under-Secretary and I heard the hon. Gentleman's point and we will examine it.
 I turn to smurfing. Lowering the threshold would always allow smurfing unless the threshold was so low as to be meaningless. The hon. Member for Beaconsfield almost invited me to enter a Dutch auction about the level of the de minimis threshold. That is not a productive exercise. Linked transactions can be apparent to NCIS, which receives all the information, but they are rarely apparent to the person who reports. 
 Confidentiality issues have nothing to do with thresholds. We are discussing a point of principle. Do we wish to create loopholes through which launderers may avoid prosecution?

Dominic Grieve: The Minister may have misunderstood my point. I said that an adviser who acts properly and receives information must put several things through his mind, one of which is, ''Is this suspicious, or am I making a mistake, and in doing so breaching the normal client confidentiality that I should try to maintain.'' Of course, he must not try to maintain confidentiality if there is suspicion or knowledge that the transaction is criminally connected, but he must bear the issue in mind. It would be unfortunate if he disclosed a completely innocent transaction and
 breached client confidentiality. A person who thinks logically, honestly and properly must take that factor into account.

George Foulkes: The hon. Gentleman must take into account what my hon. Friend the Under-Secretary said. The reporting occurs within a restricted, confined and privileged area.
 I listened carefully to the hon. Gentleman, and I have two main points. The introduction of a de minimis threshold would deprive law enforcement agencies of valuable intelligence and would have a harmful effect on the overall fight against crime. We are not just dealing with serious crime and organised crime. There is a perception, which has been reflected in the comments of various hon. Members, that serious crime always involves large sums of money. However, in very serious crime, it is often the small amounts that allow detection to take place. I could give many examples, but there is not enough time tonight to give all of them. 
 In people smuggling, exchanges of money can be relatively small, but their detection can allow us to tackle the problem. In the drugs trade, youngsters are hooked on drugs through the payment of small amounts, which results in much serious crime in the longer term. In relation to terrorism—thinking back to 11 September—the transfer of small amounts can allow the planning of major offences to be detected. Tax evasion, pornography and paedophilia are other examples of serious crimes in which the amounts involved can be relatively small. 
 I hope that I am beginning to convince Opposition Members that we should not enter a Dutch auction. The smallness of the sum does not necessarily represent the seriousness of the crime. In 2000, 10 per cent. of all suspicious transactions made known to the NCIS were of less than £500 in value. I hope that that figure is persuasive. We recognise the Opposition's argument that we should accept a de minimis provision, but a very strong contrary argument exists. I hope that that convinces the Committee. 
Debate adjourned.—[Mrs. McGuire.] 
 Adjourned accordingly at two minutes past Five o'clock till Tuesday 22 January at half-past Ten o'clock.